ECB to remain on hold?

Although the economy appears largely on track and in line with the ECB's forecasts, recent weeks have seen some risk factors develop further. While there is no evidence yet that the economy will get side-tracked by Greece or China, further deterioration in either of the two countries could pose a threat to the European growth outlook.

The ECB is expected to remain on hold for the time being, although the central bank is likely to keep a close eye on these two countries in particular. Although Greece and its creditors have struck an agreement after a long weekend of talks, Prime Minister Tsipras now faces a battle to cling on to his government's majority whilst also having to get the accord through parliament by Wednesday. 

And even if he manages to get parliament to pass the new bailout package, implementation risks remain.

"Given that there is still a risk that the Greek scenario turns ugly, it is also outlined that some of the contingency options that are at the ECB's disposal if it does have to manage any fallout from Greece", says Rabobank.